>> it's not just that inflation is going up, but the uncertainty about the future outcome is really much higher. >> if growth is slow, but earnings keep going up, the market will continue to appreciate. >> i don't see much scope for yields to move higher here. >> it is either going to be higher inflation for longer, or a fed that has to catch up. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. tom: good morning to all of you to get lisa abramowicz, kailey leinz info jonathan ferro, and i'm tom keene. we have a catholic president visiting the vatican. we will go there now as president biden begins his trip in rome. the g20 meetings, and then on to glasgow. we have seen and -- seen him come into seen peter square, seeing the vatican gardens, and no awaiting the visit with his pope, pope francis. really extraordinary to see these images after what we saw in the early 1960's with john

fitzgerald kennedy. now, president biden visits the vatican. kailey: this is a president who has not been shy about his faith. he has made it very clear throughout his service as a public servant that his faith is very important to him. of course, he is arriving at the vatican in the context of a very important g20 meeting in rome prior to him heading to glasgow. climate is going to be really front and center on the agenda. there's a few key players present. tom: what is so important about this, he has been a very forceful pope in daily messaging. the messaging is really quite strident about his linkage of his faith into the social messages addressing the g20, and of course, to be addressed in

scotland. lisa: i am very curious to what he says about immigration at a time when president biden hasn't strayed all that much from some of the policies of president trump. we know the pope has spoken about some of these policies. i wonder what could come from a meeting that might otherwise look like a formality. tom: very importantly, we welcome all of you around the world. this is a pope who, in the middle of october, his messaging really went after the economic elite. that is a theme for the elite in rome and on to glasgow as well. i believe that would be cardinal -- right now, somewhat the secretary of state for the vatican, meeting with the first lady and the president erie it and of course, they will go in

to see the pope. let us watch the imagery here. i guess the symbolism of this for america, and i clearly remember the uproar of 1959 and 1960, where an upstart senator from the commonwealth of massachusetts was trying to run for president, and there was a serious question about his faith. lisa: people saying that the pope would be running america rather than him. this time around, very different story. it is very much a backdrop, even though it is maybe at the forefront of joe biden's life. people don't really talk about it all that much. there's really not a question about that. tom: the day's imagery onto the president of italy, mr. mattere lla, and meeting with his excellency, mario draghi. lisa: it really just tripped off your tongue. [laughter] tom: for those of you that know mario draghi and his visits with francine lacqua and davos, to

call him his excellency, the m.i.t. professor has a bit of humor to it. i believe there's a little but of confusion, but there's not going to be a large press event to this important moment for the president. lisa: to me, this sets up the g20 meetings which of the main issues when we are talking about what is going on with vaccinations, what is going on with global warming, and with an economy that is very much divergent from the markets we see that are elevating and continue to be elevated today. to me, the idea that they are looking at a drastically different economy than the inflation, than some of the other readings we get from other market measures. tom: we welcome all of you will and say good morning as we look at the markets. we will address the g20 without russia and without china in a moment. futures -20. nasdaq futures taking a real hit off the apple, amazon supply-side disappointments as

well, down zero point 8%. in the bond market, let's discuss this before we get to anthony dwyer. very simply here, it is the idea of the yield space reversing back. we've come back, haven't we? lisa: to me, i think this is one of the most untold stories out there. people do not understand the volatility we have seen in the bond market. you come up with your narrative, but the volatility goes beyond that. that is when we talk about the value adjusted risk stock yesterday, tellingly from deutsche bank, the idea that that is perhaps what is driving this. tom: we will have to see. joining us now is tony dwyer, chief equity strategist with canaccord genuity. how do you reset for the dash to the end of the year? tony: we upgraded our market view on october 4. i think what people have really

missed is we called it the summer of indigestion. even though the s&p 500 was moving higher almost every day on the back of a very few stocks , the slow was kind of discounted by the average stock from last april when we downgraded the market, really through the end of september. there was really poor performance broadly. i think what is happening now is the opposite. i think there has been very good performance off of that october low, not just for the major market indices, but for the broad market with the s&p 500 earlier. lisa: we got rate earnings -- we got great earnings up until the bell yesterday, when we got amazon and apple. delivered his appointments for different reasons, but the can kind of stories, supply-side and labor costs being a lot higher. how much does that reset your view versus offsetting a buying

opportunity heading into 2022? tony: from a macro level, i haven't focused on those names a while. i'm not giving a wreck and -- a recommendation either way. but amazon is where it was last july, july of 2020. it is below where it was in july of 2020. so the idea that amazon has been a market leader over the last year is just inaccurate. if you look at apple, it is back to just a little bit above where it was in january of this year. the idea that these two specific names are missing what is going on in the rest of the market which is actually acting pretty well. lisa: one of the laggards for quite some time has been energy, and that has been an outperformer. we just got chevron earnings crossing be terminal.

they are boosting buybacks due to the energy rally. how do you approach the energy sector right now? tony: when we upgraded the market, we went overweight financials, industrials, materials, and to a lesser degree, energy. the reason is they have had such a move. buying energy on the spike that it has had i think isn't the greatest idea. if you look over the next year, will let outperform -- will it outperform? it very well could. but it is kind of dicey chasing could kind of rally we've had. tom: within that is the view forward. i just look at amazon revenues, 2019 modeled up next year, and it is a double. revenues have doubled in three years versus this horrific pandemic. this tony dwyer see a single digit or will digit world? tony: you mean and returns, tom?

tom: in terms of red sox batting average. [laughter] yes, of course in terms of returns. tony: it is so disingenuous for people like me to come on your show and have any idea what is going to happen three years from now. as long as credit is ok, i think we are going to have equities outperforming. it really depends on what credit does. there's a big misperception in the market that the long end of the yield curve is flattening, and that shows some kind of economic problem down the road. but i think the shorter duration yield curve, what really drives credit, has actually been getting better for banks and better for liquidity looking forward. so i think we are going to stay in a positive environment for equities. we will have pullbacks. got a 6.5% run in a month. the idea that we are going to have another 6.5% move very near term i think wouldn't be right. as long as the credit is ok, the

economy is moving forward, and earnings are growing up, the market goes up. tom: tony dwyer, thank you so much. lisa, i've abandoned you. we should be talking bonds here as we await the president in rome. i assume pope francis and the president are talking about the fixed income space right now. two-year yield, 0.51% it has come in. lisa: to me, they move off the ecb press conference, the idea that christine lagarde tried to push back against market expectations for a rate hike, and the market basically said we don't buy it, to me that is fascinating. she didn't do a good enough job is that is actually what she was trying to do. so we are lower, but we are still very high relative to where we had been over the last couple of years. tom: and to john authers' wonde rful essay, the market told the ecb what to do. kailey: in the market pulled

forward its expectations this morning. yesterday we were pressing in a 20 basis point hike by simmer of 2022. now it is october. i would argue christine lagarde not try all that hard to push back. she could have been a lot firmer. she actually said it is not for me to say if market expeditions are getting out of whack with reality. our bloom the reporting suggested it was mummers of the ecb who were advising her not to push back too hard. i don't get the sense that central bankers are really going to fight the market here. lisa: do you think they are pleased with her performance? tom: i think so. i think all in all, she probably averaged high marks from this off of some of the other disasters. lisa: how about the red sox batting average? tom: well, we will have to see. good morning. this is bloomberg. ♪

laura: with the first word news, i'm laura wright. results from apple and amazon have stoked fears of an unhappy holiday. both companies posted disappointing earnings reports, a sign that the supply chain crisis is hurting even the mightiest corporations. amazon is suffering because of a surge in the cost of labor and fulfillment. meanwhile, apple is taking a hit because it can't meet demand for its products. france and italy drove economic growth in the 19 nation euro area in the third quarter. a surge in consumer spending boosted french output to 3%. italy supported an expansion of 2.6% bolstered by industry and services. meanwhile, germany and spain posted gdp figures that were weaker than expected. overall, the euro area economy grew 2.2% in the third quarter. president biden has told house democrats that his future and theirs depends on passing

his economic agenda. there is a scaled-down version of his tax and spending plan that drew widespread praise from within the party, but left many details yet to be filled in. progressives still plan to hold up action on an infrastructure bill until both measures are ready for a vote. china's president xi jinping will skip this weekend's the 20 summit in rome. instead he will address leaders there by video link. xi is continuing his preference of staying home while his government takes a zero-tolerance approach to fighting the coronavirus. he has not left the country since january 2020. global news 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. ♪

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rep. pelosi: there are some things that are not in i have not given up on. i am still fighting for paid leave. i don't understand i we wouldn't have that. tom: managing the message, the speaker of the house there a most even full-day in washington. lisa abramowicz turned to me yesterday afternoon and goes, it's like the meta-verse. [laughter] we have to say thank you, on behalf of all of "bloomberg surveillance." we have to thank president biden for making us serious and adult this morning as he visits with pope francis so we didn't have to open with the meta-verse, right? lisa: how many jokes did we see on twitter yesterday? it is just so meta. they are changing their ticker to mvrs. tom: it's not meta, huh? kailey: and not meta materials,

the canadian materials company that was up 32% after hours yesterday. lisa: what is your view on what it should be if it is not faang? maang? tom: i think it's got to be gaama. right now, she's distracted with a small football game this weekend. the pope will be watching michigan state and michigan. emily wilkins, on radio, she is lovely as a member of the michigan state community, and she joins us this morning. what does the president come back to? emily: the president comes back to a congress that a somewhat closer to passing his agenda, but really still has a long way to go. president biden showed up in congress to talk to lawmakers about his latest framework proposal, a one point seven $5 trillion package. that does include some things -- $1.75 trillion package. that does include some things democrats wanted, expanded

medicare for dental and vision, but biden came to congress yesterday and said, can you guys go ahead and pass that bipartisan info structure bill is i am going overseas? progressive democrats said we can't do that because we still don't trust that the social welfare bill we have pushed for is actually going to go across the finish line. it is not that they don't trust the president, they tell us. they don't trust joe manchin and kyrsten sinema to really be able to pass this bill at the end of the day. so they are waiting to get both done at the same time. that is what president biden has waiting for him when he gets back. lisa: what is the most controversial aspect of the new tax proposal? emily: it depends who you are. if you are a democrat, one of the most controversial things is that you don't have that raising of the corporate rate. you don't have some of those taxes that were initially proposed on higher earners. that is a huge concern. it is also a concern person democrats that this point, the ash concern for some democrats

that at this point, the framework -- concern for some democrats that at this point, the framework does not include anything on salt, that state and local tax. lisa: does this affect the gubernatorial races we are seeing in new jersey, and particularly virginia? emily: terry mcauliffe cannot be happy about this development. he has called on congress to pass that infrastructure bill. it would give him another talking point on the trail. it would give him a chance to tout his party as the party that gets things done. he doesn't have that right now, and he is locked in a very close race with republican nominee glenn young can. this is the race -- glenn youngkin. this is the race to watch on november 2. this has been a swing state in the recent past. it is really going to be a bellwether for what to expect for the 2022 midterms, and who ultimately controls both chambers of congress. kailey: i would like to remind tom that my home state of

virginia will be the most important state in the union, if only for one day, next week. this goes back to what president biden reportedly said to lawmakers yesterday, where he said my presidency and our majorities in both the house and senate depend on what happens in the next week. if that indeed is true, why is that not putting more pressure on progressives in particular who are holding things back? emily: they see it, that to really get the president's agenda done, they need to also pass the social welfare plan. at this point, they simply don't trust that a framework is enough. you saw the framework come out, and the reporters turned to manchin and synema and said come are you on board with this? neither of them said yes. when progressives hear that, they say it doesn't sound like we do have a deal that has all 50 senators on board, so i would we pass infrastructure now if we

don't have a guarantee on that social welfare bill? kailey: so what kind of timeline are we realistically looking at before this is actually a bill that can be signed, sealed, and delivered? emily: lawmakers i spoke to yesterday say they think they can wrap this up in the next week. after that, the house is supposed to leave d.c. and go back to their districts, so they feel like they are close with the framework. at one point yesterday that might have gotten lost in the shuffle, progressives did come out and embrace the framework despite the fact that it did not have paid leave or expansion of medicare. they said we really do support this. we just need to make sure that those two senators are on board, and we are going to be good to go ahead. then again, the only real deadlines we are facing at this point our december 3, when the temporary highway stopgap expansion past last night expires. also, when the debt limit expires. we are looking at a very busy time around the end of november. tom: emily wilkins, thank you so

much. go spartans. lisa, can you explain the framework? to me, it is frankly, i may be wrong on this, but to me, it is frontally original. lisa: it is a list of compromises with synema and manchin's fingerprints all over it. i think the really interesting thing is how little there has been talk about the stock buybacks in the new tax that is going to be a plummeted, the 1% tax. also, the extra surcharge on ultra wealthy individuals. i don't have a good sense of what is actually going to get passed. frankly, the devil is in the details, and right now we see no details. tom: we go back to virginia and the politics there. and a right to say this is a close race? kailey: it is a very close race, and virginia is a state that has turned solidly blue in the past

couple of elections. president biden beat out trump by a decent margin in the presidential race in 2020. the question is, if youngkin does beat terry mcauliffe, how does that bode for other states that have been leading blue recently? what does that signal about democratic desire in order to turn out and vote? you saw a real fire under the belly in the presidential election. people wanted to vote against president trump. but if that fire is gone because they are disappointed with what president biden has been able to turn out, that does not bode well for the midterms in 2022. tom: the lady from virginia will help us with thi next week. geography of virginia, the demographics of virginia are absolutely extraordinary. it is true of many of our other states, but it is an interesting story. kailey leinz be of huge help there next week. the president and the first lady at the vatican meeting with pope

francis. he greets the gentleman from arch mayor academy of delaware. the vix from a 16 level, some tension to 18.03. stay with us. this is bloomberg. ♪ ♪

>> the dynamics of the spread, the duke -- the difference between the 10 year. it was grandma as they say --gamma, as they say. >> britain much, that's what we are doing and that will be be extent of it. at this is the issue. why has there been so much volatility when nothing is changed. what are economists clinging to

to tell the new narrative that we are getting closer to the new normal? >> let's go meta. it's a granular research note. q3 grandma, but then you abruptly reverse to optimism -- q3, but then you abruptly reverse to optimism. >>'s we already know that things like airline numbers and hotel occupancy rates should have been up again after the delta hit. we went from a very stimulated second-quarter, a lot of that money was spent in the second quarter. but it was missing from the third.

crossing my fingers and hoping we don't have such will have a ship again. it is hard to see how they could be as weak in the fourth quarter as it was in the third. consumers have got a lot of cash to spend so hopefully we get a blockbuster holiday season. >> the macroeconomics and culture of china, what is your take on the chip shortage as almost a global event? regional event? is it done? >> it's for real. the global supply chain is a part of that, completely turned upside down especially in the u.s. because of covid so that pulled chip production into

consumer goods. it left a lot of industrial components stock with chips. i do think that's going to change and as that changes as people switch back to services post-covid, we are seeing the supply chain beginning to respond to the pressure. my guess would be a year from now, maybe, we would see more -- less demand and more supply. we can start getting very optimistic about the short-term. we've got to suck it up for another few months because the supply chain cannot survive with the increase in demand that we've seen. it is a system that was running on equilibrium and it has to find a new one and it is going to take them time. >> we are not very patient as

human species in general. we are looking at the now. this has led to the sentiment. how much does that change the narrative and change the economic trajectory in that space before the problems are fixed? in other words, slowing things enough to put a wrench in the recovery? >> consumers are not happy. inflation expectations have gone up. u.s. households are sitting on $3.8 million they did not have -- 38 -- $3.8 billion they did not have a year ago. in the short-term, i think things are going to get worse rather than better.

we do have a squeeze, but consumers confidence will go back up as covid disappears. why did he go up? because covid cases are decreasing. >> the supply chain disruptions and the need to pay people more to get them in the door. at what point does this bleed into materially higher wages? >> it's just a matter of time for those wage numbers accelerate. i would not be surprised if the consensus is that it's too low. i think we are going to see some of that labor supply returning

so the extended benefits that kept people out of the workforce over the summer, covid is diminishing because covid cases are falling. at the same time, i'm bullish about volatility growth because we are seeing businesses finally start spending. capital goods orders are the single strongest macro right now. there is nothing else that strong. that is consistent with the idea of growth. you have to look at the productivity side. i'm more optimistic about that that i have been for the last 20 years. >> i'm glad you brought up those supplemental that rolled over last month because that is part of pandemic era fiscal policy.

we had a longer-term economics package in the works on capitol hill, but it looks like it is going to be much smaller especially in terms of the spending than initially thought. how does that transform your thesis or what fiscal policy is going to do to the american economy? >> it is still going to be quite new that she quite loose next year, but it's not about a big drop in the headlines between this year and next year because most of the money that drove up our deficit was not actually spent. it was transferred from the public sector to the private sector. what looks like a big headline shift in a negative direction really isn't because most of the money is still available to be spent on businesses and by the visuals. -- by individuals. with the infrastructure,

spending is going to imply that maybe another 150 billion dollars of government spending year. i'm not too concerned about it. >> so you are not buying tighter fiscal policy. you buying what the market is selling? >> i've been in the 2022 for some time. the market is over taken. the market is saying june. i'm looking at june and i'm thinking the tempering, to immediately raising rates i think the fed has it all wrong about inflation. i don't think that they do. it's dangerous that tomorrow is going to look like today. tomorrow could look very different opinion on what happens with this productivity

and this global supply chain. i think the fed wants to get the lay market back to where it was before covid. my expectations have swung everywhere. the bank of england, so there's been a big shift. the fed is enamored with this idea ever going to get higher but not sustained inflation. i do think the next few months are going to be really tough. they are going to have some big communications problems because inflation is going to shoot higher, and they are what you have to take a really brave stand to resist the pressure. i think there is probably more to come. ian shepherdson >> ian shepherdson thank you so

much. the timeline here is the great mystery. the parsing of exports and imports, i've never seen this. over a certain amount of time, publishes the first 4.2% statistic for the fourth quarter. my head is spinning. >> it comes in so much higher than where we are right now. at the is that the is how much are we delaying the recovery versus just completely disrupting it to mark that really was the question yesterday. we got those third-quarter gdp. i don't know. if you want those iphones, you keep trying for them. you delay or purchase that was not captured in the previous quarter. >> i think with apple that's

plenty clear -- i think with apple that's pretty clear. very important, reporting on research at goldman sachs. it up 8% with a smaller dividend increase across all of the s and p 500. >> what goldman is referencing is elevated cash balances and directly mentioned those are going to push up and cash spending on buybacks. is definitely an interesting story. buybacks will be taxed. >> is a dow free meta. the president can't be talking

aboutme -- talking about meta. >> the president is it talking about meta, rather the g20 summit. how much is up in the air, the push to achieve zero emissions by mid century now looks out of reach. the u.s. and taiwan are working together as a semiconductor supply chains, called all companies related to the chip shortage. resistance and taiwan and south korea. chevron posted the biggest profit and more than eight years refining -- eight years.

chevron is now considering whether to increase its share buybacks. microsoft is on pace to beat out apple to become the largest company by market value. microsoft -- during regular trading hours. the software giant would have a market cap beating apple. the last time microsoft dethroned apple was in the third quarter of 2020. global news 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. ♪

>> we should ask ourselves at one foot -- at what point we

say, look, it's time to consider ourselves having turned the corner? that's a move in the right direction. >> david doughty, it's -- david dowdy. maybe john is in rome. maybe he is at the vatican. i'm not sure. we welcome all of you. the president of the united states meets with -- and first lady meets with pope francis. a conversation with bruno lemaire, a political voice of france. this was a topic of conversation

. covid will be a topic. we will do a different conversation today on this horrific pandemic as the pope has a primal scream over the distribution of the vaccine. what is our scorecard on the distribution globally of these life-saving vaccines? >> i think you would probably put it as at best a c if you are grading it. certain countries have been doing a fantastic job. that's because they have had the resources to be able to get their orders in for vaccines and have those vaccines delivered early and invest in significant distribution once they get those

vaccines. the majority of the world is stopped at the starting line, meaning that they cannot get enough vaccines to initiate widespread vaccination campaigns. we really have a lot of work to do to get this pandemic under control at the global level. >> a lot of people say if there is a problem, throw money at it. we threw money at some places but then there was a tracker of where it went and it found that it was not going to getting vaccines in people's arms. how can we more effectively do this without just wasting money and without just trying to engender some sort of political alliance that isn't there? >> there has to be an accountability when countries get vaccines and there has to be a plan in place to effectively distribute those in the priority groups that are important for that country.

i agree with you completely. this is not just a matter of throwing money at it. it is a matter of having in place the infrastructure, plan and account ability to make sure that those vaccines are being distributed in the right way and in a timely manner. >> we were talking about the pediatric vaccines that should be coming on pretty soon. i asked him whether he thought there should be a vaccine mandate to go to school and he was not so sure. he said it was important to get the data first. do you agree? >> mandates should be our last resort because mandate always come with a feeling that people are being forced to do something and that engenders the initial pause or hesitancy. i think we have to focus, two things. the data. and the data for pediatric covid-19 vaccinations look good, particularly with the safety

issues and the adverse effect which are a priority for the fda advisory panel discussion. it is clear that the risk of covid in younger populations is less then for the over 65, but it is still a significant risk. the vaccines is a safe way to get to immunity as opposed to -- to get to immunity. -- rather than trying to dictate because often times that is not the most effective way. >> we are all very focused and for good reason, but it is called in new york. how worried are you about the pandemic and flu season happening at the same time and other illnesses that are not covid-19, but could be severe?

>> i think this year we are much more worried about influenza. we are starting to see cases of influenza, something we did not see this year -- last year at this point in time. increases in other respiratory viruses. some of them are mild like the common cold, but others can be very severe. that usually is the vanguard of what's going to happen in the flu season. the relaxation of health -- public health interventions, we are starting to see more respiratory viruses and we are moving into flu season and we are worried that we are going to see increased cases of the flu and have confusion between do i have covid, do i have the flu? >> does the flu make us so fragile that we use the word comorbidity? >> that information is still a

little bit unclear because when covid came through the publishing, the flu went away with these public health interventions so it's still not clear what the interaction between those two is. let's go back to the pediatric appellation. influenza is terribly problem eric -- problematic in the pediatric population and in the elderly. they are going to be like hey, i don't have covid. this is great and not realized that they could be infected with something equally as dangerous. >> andrew pekosz, thank you so much. we greatly appreciate it. andrew pekosz of johns hopkins bloomberg school of public health. i'm going to suggest, you are in the absolute crosshairs with you

and all of your acquaintances about some people urgently getting their kids vaccinated and others genuinely scared stiff. >> depends on your zip code. they are going to ask your views or get a booster shot illegally ahead of their time. everyone wants to get their kids vaccinated so we can travel and go back to normal and not have to worry so much because it's still here. >> let me set the template for you. there is lots of talk about the gdp swing. michael purvis -- michael purves scheduled to be here. annmarie hordern in rome as we begin the presidential five days of president returning to washington. he is finishing up with the

first lady, a meeting with the pope. secretary of the vatican. stay with us. from rome and new york, this is bloomberg. ♪

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>> is not just inflation is going up. >> equity response generally positively to inflation until it hits a certain level. >> really don't see much more scope for two-year yields to move much higher. >> this is bloomberg surveillance. >> good morning. jonathan farrow. interesting and unique friday for bloomberg surveillance. we welcome all of you. it lisa, we are going to get to the markets with michael purves. if president and first lady finishing up a meeting scheduled with thebe